by DAVID BRADSHAW
Editor,Real Money Perspectives
12.14.12--Markets Frozen on the Fiscal Cliff-Listen
Gold prices steadied below $1,700/oz. Friday on profit taking and bargain hunting. Stocks flat despite Fed pump. Gold last traded at $1,695 an ounce. Silver traded at $32.28 an ounce.
MARKET NEWS HEADLINES
-U.S. Stocks Erase Weekly Gains -WSJ
-U.S. inflation under wraps - Marketwatch
-Why Central Banks Can't Let Up on the Stimulus Pedal - CNBC
-UNIMAGINABLE SCHOOL SLAUGHTER LEAVES DOZENS DEAD - DrudgeReport
SANTA EXPLAINS "THE GREAT DEBASEMENT" - Editor
Your editor volunteered to play Santa at a Christmas/birthday party this week. And what did Santa bring for all the good boys and girls? You guessed it, a copy of our newest book, "The Great Debasement". I sat down and explained to one and all what has happened to our money over the last century in a nutshell. Most were surprised to learn that our modern "dollar" retains a mere 1-2 cents of its original buying power. As Mark Twain says, "The truth is stranger than fiction!"
TOP STORIES OF THE WEEK
OBAMA CUTTING BACK, WE SHOULD TOO! - Editor
President Obama recently ordered the cabinet to cut $100,000,000.00 ($100 million) from the $3,500,000,000,000.00 ($3.5 trillion) federal budget. So, if I took his lead how much would I need to axe from my personal $2,000/month budget?
Well, instead of spending $2,000 a month, I'd have to cut that number by six cents. Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about.
FED HANDS OBAMA POWER TO SHAPE MONETARY POLICY - NewsMax
Clearly the fabled Fed "Bazooka" of stimulus has become a mere pop gun - unable to rescue our wallowing economy, yet now required to prevent it from falling asleep.
The Fed intends to hold interest rates near zero until 2015 or beyond, a policy that economists call "financial repression" because it means that banks will pay savers less than the rate of inflation. Savers will continue to lose money by having bank accounts, and will feel pressure to move their money into riskier investments.
Americans may get a lump of coal in their Christmas stockings for the next four years, along with a bill for President Barack Obama's pending carbon tax. The Fed this week, history may record, virtually handed its power to shape and regulate monetary policy to President Obama.
[Above column is by Lowell Ponte, co-author of The Great Debasement]
FED ACCELERATES 'GREAT DEBASEMENT' OF U.S. - Craig R. Smith
"The Fed policy statement today, focused on tying interest rate moves to the unemployment rate, is unprecedented", according to author and Swiss America Chairman Craig R. Smith. Mr. Smith asks...
-What if unemployment never goes below 6.5%? Will Fed funds be zero forever?
-What if more people leave the work force and unemployment falls below 6.5% as a result? Will that be the right time for the Fed to raise rates?
-Why are interest rates now tied to unemployment and inflation, but the purchases of MBS and Treasury debt are tied to nothing?
Smith says the Fed's move is bullish for stock, gold, silver and commodity prices. This represents a double-pumping of money from a year ago. The Fed, in his opinion, has decided to attempt to print their way back to financial health.
"This is like pumping more heroin into a junkie to make him better. Until the junkie dies, he might look and feel great, but this type of treatment plan in reality will only hasten the junkie's demise."
GOLD AND SILVER POISED FOR MAJOR MOVE - GoldSwitzerland
Gold and Silver poised for major move, according to GoldSwitzerland's Egon von Greyerz. The fundamental and technical picture could not be better for gold and silver.
Most governments' deficits are escalating at a fast rate. Money printing worldwide is likely to accelerate rapidly and could reach exponential rises in the next 1-3 years.
Gold and Silver will continue to reflect the destruction of paper money but must be held in physical form and stored outside a very fragile financial system.
The next target for Gold is still $4,500-5,000 and for Silver $150. These targets could be reached in the next 12-18 months. Longer term targets are much higher.
More: Swiss America Gold Market News